Sneaky trick to get breakdown cowl for lower than a 3rd of the value

Drivers who buy breakdown cover directly from the AA or RAC are paying up to three times more than they need to, Money Mail can reveal.

Millions of prudent drivers fork out around £80 a year — worth up to £1.2 billion in total — for AA or RAC cover to guarantee they can access help if their car stops working when out on the road.

Both companies have good reputations for customer service and attending breakdowns speedily and have their own fleets of recovery vehicles.

But drivers could slash costs by buying bolt-on cover as part of their car insurance rather than buying standalone policies directly from the AA or RAC.

RAC’s roadside breakdown cover averages £77 a year, depending on location and vehicle, according to researchers at consumer group Fairer Finance.

But the same cover is available from £21 if bought as an add-on to 1st Central car insurance — a 72 per cent saving.

Even the most expensive add-on cost for RAC cover found by Fairer Finance — £36 from Tesco Bank car insurance — would still amount to a saving of 53 pc.

AA standalone roadside breakdown cover averages £85 a year, according to Fairer Finance data, but drivers pay just £44.95 if they buy it as an add-on to Admiral car insurance.

Fairer Finance found that of the top ten largest car insurers, four use RAC for their add-on cover (Aviva, Hastings Direct, Saga and Tesco Bank) and two are signed up with the AA (Admiral and AA Insurance).

LV, the third-biggest car insurer, uses sister company Britannia Rescue for its breakdown cover, while Direct Line and Churchill use their own sister company, Green Flag.

A Fairer Finance spokesman said: ‘In essence, when purchasing as an add-on, you are buying an AA or RAC membership, since the cover provided does not differ greatly from a standard membership, though a few cover levels might be adapted.’

The reason add-on breakdown cover costs less is that insurers drive hardbargains with the AA and RAC to get the best rates for their customers in exchange for promoting the firms’ services.

In some cases, the add-on may offer cover that drivers could find more useful than the standalone deal. 

For example, 1st Central’s RAC Breakdown will help if your vehicle runs out of fuel, whereas RAC’s own policy says this is a fault of the driver, and is therefore not covered.

Even at higher cover levels, drivers can save money by buying breakdown as an add-on.

For example, full UK and European cover are three times as expensive when bought direct from the RAC compared to buying from car insurance providers such as Halifax or 1st Central.

However, watch out for pitfalls as there are disadvantages to buying breakdown cover as an add-on.

First, you have to be happy with the car insurance policy that the breakdown cover comes with — there is no point picking the cheapest breakdown add-on if the insurance does not suit you.

Second, add-on policies tend to be standardised and harder to tailor to your specific needs than standalone deals.

Drivers should always check that an add-on policy offers the level of cover they require as it can differ from policies bought directly.

Motorists with add-on policies can also easily forget that they have the cover.

As many as 33 per cent of drivers with standalone breakdown cover made a claim in 2022, according to the most recent figures from regulator the Financial Conduct Authority. 

But just 11.65 per cent claimed through their add-on breakdown cover in the same period.

Fairer Finance managing director James Daley says: ‘People who are buying standalone cover have spent more time making a conscious decision to buy that cover, and maybe shopped around.

‘Whereas buying it attached to a motor policy, it’s a much more passive experience. It’s possible some people don’t realise they’ve bought it, or forget they have.’

Both ways of buying breakdown cover were equally likely to come good when you need them — 96 per cent of cases for standalone cover and 93 per cent for add-on.

Some packaged bank accounts, such as Nationwide’s Flex Plus, also provide breakdown cover alongside other benefits (typically, travel and gadget insurance).

These accounts have monthly fees ranging from £10 to £20 a month, which means that when you factor in all the perks they can work out cheaper than if you buy breakdown cover directly through the AA or RAC.

In some cases they are even cheaper than buying cover as a car insurance add-on.

Lloyds Bank’s Silver Club Lloyds account costs £10 a month (£120 a year) and provides AA family roadside breakdown cover.

This gives you and eligible family members breakdown cover in any vehicle, whether travelling as driver or passenger.

Buying this directly from the AA would cost £210, and wouldn’t include the European family travel insurance and mobile phone insurance that the Silver Club Lloyds bank account also offers.

If you bought it as an add-on to an Admiral car insurance policy, it would cost you £90, assuming you buy vehicle breakdown cover for two cars.

Nationwide’s Flex Plus account provides European and UK breakdown cover for a couple and costs £156 a year. It also provides gadget and travel insurance, as well as perks such as no foreign transaction fees.

Buying the equivalent breakdown cover as an add-on would cost nearly £200.

The value of packaged current accounts varies, depending on whether you use the perks they come with.

A spokesman for the AA said: ‘AA breakdown cover is available through packaged bank acc-ounts, however the level of cover varies, depending on the bank account a customer holds.

‘Purchasing cover directly enables customers to pick and choose their level of cover, dependent on their needs.

‘Purchasing cover directly through the AA also provides customers with additional benefits that aren’t always available through packaged bank accounts, such as 15 per cent off Greene King, up to 30 per cent off Vue, plus discounted MOT and vehicle servicing.

‘If a customer who currently holds AA cover through their bank calls us to buy direct, or already has cover direct, then we’ll flag that to them and advise that they choose the cover that best suits their needs.’

The RAC has been approached for comment.

If you do want to buy breakdown cover as a standalone deal, there are cheaper options than the AA or RAC. These include smaller rivals such as Green Flag, AutoAid and Britannia Rescue.

None of these firms has its own fleet of recovery vehicles, and instead relies on a network of independent operators.

But the savings can be significant. For example, AutoAid charges from £57 a year for a motorist and their partner for any vehicle they drive.

The cover is also more comprehensive than basic breakdown cover as it includes support if you have issues with the car at home and compensation if you use the wrong fuel.

However, for cars that are ten years old or more there is a callout fee of £25.